6g ADR presentation
ITEM NO: _6g_Supp MEETING DATE February 27, 2018 Airport Dining & Retail Amendment to Lease Group 4 Authorization Authorization Request February 27, 2018 Agenda Rationale for Amending the Lease Group 4 Authorization Amended Lease Group 4 Opportunities Schedule Providing new dining and retail opportunities at the Airport 2 Rationale for amending the Lease Group 4 Authorization Two leasing opportunities in LG 3 were suspended due to the receipt of bids that significantly exceeded the budget for enabling infrastructure projects. The Port reconfigured these infrastructure projects and subsequently received more reasonable bids for this work. Construction is now underway. In order to have new dining capacity ready when the Central Terminal Infrastructure Upgrade Project is completed, the solicitation process for these leasing opportunities needs to be restarted. Since the date when these opportunities were authorized for competitive solicitation, the Commission made several significant changes to the minimum qualifications and scoring criteria that were used for LG 4. Staff recommends amending the LG 4 authorization to allow these two opportunities to be competed with the minimum qualifications and scoring criteria approved by Commission for LG 4. Recommend competing these opportunities under LG 4 rules 3 Amended Lease Group 4 Opportunities F-9 F-8 Mezzanine Level Not Shown Both opportunities are in the Central Terminal 4 Schedule for these 2 Opportunities Projected Date Action February 27, 2018 Request Commission to amend Lease Group 4 authorization March 2, 2018 Advertise opportunities (via leasing website and through various local and national media) March 21, 2018 Tours and training sessions for interested businesses March 2 through May 31, 2018 90 days for proposal preparation May 31, 2018 Responses due July/August 2018 Port teams complete their evaluations August/September 2018 Notification to preferred respondents Update Commission on these Lease Group 4 results September/October 2018 Lease negotiations and executions These opportunities are ready for the marketplace 5 Proposed Amended Lease Group 4 Schedule vs. Central Terminal Enhancement Project Schedule 2018 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Solicitation and Award Process Central Terminal Infrastructure Upgrade Project Phase 1 Design and Construction F-9 Central Terminal Infrastructure Upgrade Project Phase 2 Design and Construction F-8 Authorization now is important to ensure new dining capacity is ready 6 APPENDIX Commission Guidance for the ADR Master Plan Encourage broad business participation. Use flexible competitive leasing processes to accommodate all types of business. Create new opportunities for small, disadvantaged and local businesses. Maximize employment continuity for qualified employees. Continue 'street pricing' of products and services. Improve efficiency and affordability in the unit build out process. Establish job quality expectations in competitive processes. Strengthen the local Pacific Northwest sense of place. Support a mix of businesses that create quality jobs 8 Commission Goals for the ADR Master Plan Grow sales per enplanement by at least 40 percent. Reach and remain within the top 10 North American airports as ranked by sales per enplanement. Grow gross revenues to the Port by 50 percent. Grow employment by 40 percent. Grow the share of sales generated by small, disadvantaged, and/or local businesses to 40 percent. Create an aspirational objective of increasing ACDBE gross sales to 25 percent of total sales. ADR opportunities grow with the Airport 9 Solicitation Process Overview Competitive Evaluation Process (CEP) Simplified process for 1-3 unit opportunities Tailored to capabilities of small business Request for Proposal (RFP) Used for packages with 4 or more units or a single unit requiring a large investment Tailored to capabilities of large companies but encouraging small business participation Requires companies to submit greater detail and demonstrate greater financial capability Competitive solicitation process reflects Commission guidance 10 Changes Incorporated in the Lease Group 4 Competitive Solicitation Process CEP and RFP Proposition 1 Compliance: Firms who are not fully compliant with Prop 1 back wages and benefits were to be disqualified from participation. Scoring the Quality Jobs Criterion: A greater emphasis was placed on proposed wages and medical/retirement benefits in the scoring of this criterion. A quantitative-formula-based methodology was utilized for evaluating wages and medical/retirement benefits. Scoring the Small Business Participation Criterion: The scoring system was revised as follows: Small businesses that propose directly would still automatically receive 10 points. Large businesses that propose a joint venture with a small business and that agreement meets the FAA guidelines for joint ventures and includes a minimum of 20% share of capital investment would automatically receive 5 points. Competitive solicitation process reflects Commission guidance 11 Changes Incorporated in the Lease Group 4 Competitive Solicitation Process CEP and RFP (cont'd) Pacific Northwest Sense of Place: 10 points of the Concept Development criterion (25 points total) was allocated to the evaluation of the concept as it pertains to creating a Pacific Northwest Sense of Place within the Airport. Labor Peace Agreements: A labor peace requirement was implemented as follows: All non-exempt respondents must submit a labor peace agreement with their proposal. The Port would have no role in reviewing or establishing the terms of these agreements. Small businesses which have 35 or fewer badged airport employees would be exempted. Competitive solicitation process reflects Commission guidance 12 Established Evaluation Criteria Company Experience, Financial Capability: 20 points (13%) Concept Development: 25 points (17%) Unit Design, Materials and Capital Investment: 25 points (17%) Financial Projections and Rent Proposal: 20 points (13%) Management, Staffing and Environmental: 20 points (13%) Job Quality, Employment and Service Continuity: 20 points (13%) Small Business Participation: 20 points (13%) TOTAL POINTS 150 points (100%) Evaluation criteria support Commission priorities 13 New opportunities ready for the marketplace 14 New opportunities ready for the marketplace 15
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